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Tag Archives: Federal Budget

Yesterday, in Washington, the United States House of Representative passed a budget resolution, which will allow Congress, as it considers tax reform, to deny citizens the ability to claim a Federal Income Tax deduction for the amount of money they have already paid, in state and local taxes. This deduction, known by the acronym SALT (for State And Local Taxes), has been part of the United States tax code as long as there has been a federal income tax.

Repeal of the SALT deduction would lower home values and constrain New Jersey local budgets, which rely on property taxes to fund essential services and programs, more so than municipalities in any other state.

On Wednesday, we asked you to contact your representatives, in opposition to the resolution. Thanks to those of you who did, eleven members of New Jersey’s twelve member delegation voted against the proposal, because of the threat it poses to preservation of the SALT deduction.

We thank Representatives Gottheimer, Lance, LoBiondo, MacArthur, Norcross, Pallone, Pascrell, Payne, Sires, Smith, and Watson Coleman for their support. If your municipality is in any of the Districts that they represent, please express your gratitude for their consideration.

The fight to preserve SALT goes forward. The House is scheduled to release a draft tax reform bill next week. From there, it will go to the Ways and Means Committee. We will let you know what actions are needed, once we are able to evaluate that proposal.

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Tomorrow, the United States House of Representative will be asked to vote on a budget resolution. If passed in its current form, that budget would allow Congress, as it considers tax reform, to deny citizens the ability to claim a Federal Income Tax deduction for the amount of money they had already paid, in state and local taxes. This deduction, known by the acronym SALT (for State And Local Taxes), has been part of the United States tax code as long as there has been a federal income tax.

Repeal of SALT would lower home values and constrain New Jersey local budgets, which rely on property taxes to fund essential services and programs, more so than municipalities in any other state.

As a local leader, committed to what is best for your citizens and your municipality, please contact your Congressional District’s Representative in the House today. Sending a strong message of opposition to the elimination of the SALT deduction will help to ensure that New Jersey’s entire Congressional delegation will refuse to support any bill that puts this deduction at risk.

Take action today: Please call your member of Congress (202) 224-3131 and urge them to protect SALT.

Here are talking points from Americans Against Double Taxation below, which is working closely with the National League of Cities (NLC) and the US Conference of Mayors:

Property Tax Deduction Background and History

The Federal Income Tax Code allows filers to claim a deduction for the amounts they pay in State and Local Taxes. This deduction, known by the acronym SALT (for State And Local Taxes), has been part of the United States tax code as long as there has been a federal income tax.

SALT is one of the six original federal tax deductions and has prevented taxpayers from paying a tax on money that is already taxed (sometimes called double taxation), and has helped support state and local investments since 1913.

SALT Benefits the Middle Class

Nearly 86 percent of taxpayers who claim the SALT deduction have an adjusted gross income of under $200,000.

An overwhelming number of the 44 million taxpayers, who claim SALT, include in that deduction their property taxes (40.7 million), and many also claim the mortgage interest (35.4 million) deduction. Eliminating SALT will diminish the number of itemizers, increase the after tax cost of a mortgage, and is projected to result in a 10% decline in home values, in the immediate term.

SALT Benefits Homeowners

Eliminating the SALT deduction would raise taxes on middle class homeowners – even if the standard deduction were doubled. A recent study commissioned by the National Association of Realtors found that homeowners with an adjusted gross income between $50,000 and $200,000 would see an average tax increase of $815 if SALT were eliminated and the standard deduction were doubled.

SALT Supports the Community

SALT helps support public services and vital investments at the state and local level, including infrastructure, public safety, homeownership and education.

If SALT is eliminated, vital public sector services will be at risk. This is because the after tax cost to taxpayers of these services will increase, and state and local governments will find it harder to maintain the necessary level of services.

SALT is Bipartisan and National

SALT is claimed by 44 million taxpayers in all 50 states, including both Democratic and Republican districts.

High-tax states are not receiving subsidies from others as a result of SALT. To the contrary, states that get the highest return on the taxes they send to Washington are mostly lower tax states under the present tax law with SALT in place.

SALT Prevents Double Taxation and Preserves Fiscal Federalism

SALT prevents double taxation of Americans by allowing taxpayers to claim a deduction for the state and local taxes they have already paid from their incomes.

SALT maintains carefully balanced fiscal federalism by allowing state and local governments to support state and local services.

SALT has been a fixture of the federal tax code and our nation’s fiscal federalism for more than 100 years to guard against double taxation of households and protect the fiscal integrity of state and local governments, and it should remain in the tax code without limitation.

Contact: Jon Moran, 609-695-3481 x121 or jmoran@njslom.org

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The Department of Justice bill would provide nearly $2.5 billion in funding to support local law enforcement programs. This is $440 million more than the President’s 2018 budget and $140 million more than 2017 appropriations. The bill increases certain local law enforcement programs, including funding for body worn cameras, the Second Chance Act, violence against women activities, drug and veterans’ courts, and mentally ill offenders. It also consolidates the COPS hiring grant program and Byrne JAG program under a single funding stream. However, the House bill cuts vital funding for addiction and recovery programs used to fight the opioid epidemic even more drastically than the cuts proposed by the White House.

The following chart compares funding for key municipal programs in the current (FY ’17) Budget along with funding requests in the President’s proposal, as well as funding authorized in the bills approved by the House Appropriations Committee:

Yesterday, Office of Management and Budget Director Mick Mulvaney released the Administration’s full Fiscal Year 2018 budget proposal to Congress. While we knew that vital programs for municipalities would likely be subject to significant reductions, the full budget proposal is even more concerning than expected.

The proposal calls for $54 billion in cuts to domestic programs and even more severe cuts to social welfare spending. It includes the total elimination of some 66 programs, including Community Development Block Grants, Community Service Block Grants, Health Professions and Nursing Training programs, HOME Investments Partnership program, the Low Income Home Energy Assistance Program, and the National Infrastructure Investments (TIGER) Grant program. The budget also looks to cut $610 billion from the Medicaid program, over the next 10 years, while slashing $400 million from support for local substance abuse and mental health programs.

The proposal assumes the elimination of the Affordable Care Act, which, according to one independent analysis, would cost New Jersey $31 billion, over the next 10 years. That Urban Institute analysis also projects that New Jersey would lose 20 percent of the federal funding it would otherwise receive, under the ACA. That would make our State the hardest hit of any in the Nation.

The proposal now goes to Congress, which still retains the power of the purse. The Federal budget year commences on October 1. Thus, Congress will have until midnight, September 30, to enact legislation to govern federal spending throughout the next Fiscal Year – or to enact a stop-gap measure to keep the government offices open and federal programs operational.

League President, Mayor Al Kelly of Bridgeton, and our League Officers, will be contacting all the members of New Jersey’s Congressional delegation, expressing our concerns with the proposal and the need for major changes. Likewise, our federal partners in Washington, at the National League of Cities (NLC), will do their best to convince all (or, at least a majority) in the Senate and the House of the need for significant modifications.

But to save the vital programs that make our State and our municipalities strong and stable, we need your help. Click here to send a letter to your members of Congress today and tell them how the Administration’s budget proposal will impact your community. By sharing real examples of how your hometown leverages federal funds to build your community, we can stop this budget proposal from becoming reality.